QUANTITATIVE METHODS

Presentation

By

Prof. (Dr.) T. Muthukumar

M.Sc; MCA; MBA; PhD.
Professor – Business Analytics
XIME-Bangalore
QUANTITATIVE METHODS
 Measures of Dispersion
• DISPERSION: “The spread or variability in
a set of data”
• “Dispersion is the measure of the variation
of the items – A.L. BOWLEY”
• “The degree to which numerical data tend to
spread about an average value is called the
variation or dispersion of the data –
SPIEGET”
2
QUANTITATIVE METHODS
 Three Measures of Dispersion
1. Range
2. Variance
3. Standard Deviation
• Range: “It is defined as the difference
between the value of the smallest item and
the value of the largest item included in the
distribution”

3
QUANTITATIVE METHODS
• Range = L – S , Where L = Largest item, S =
Smallest item.
• Coefficient of Range = (L – S) / ( L + S)

4
QUANTITATIVE METHODS
• Ex.1: Find the range for the following frequency
distribution :
----------------------------------------------
Size of the item Frequency
----------------------------------------------
20 – 40 7
40 – 60 11
60 – 80 30
80 – 100 17
100 – 120 5
-----------------------------------------------
Total 70
5
QUANTITATIVE METHODS
• Ans.1: Here, the upper limit of the highest
class is 120 and the lower limit of the lowest
class is 20.
• Hence, the range = 120 – 20 = 100

• Ex.2: The following are the prices of shares

of AB Co. Ltd. From Monday to Saturday.
Calculate range and its coefficient.

6
QUANTITATIVE METHODS
 --------------------------------------------------------
Day Price (Rs.)
-------------------------------------------------------
Monday 200
Tuesday 210
Wednesday 208
Thursday 160
Friday 220
Saturday 250
------------------------------------------------------
7
QUANTITATIVE METHODS
 Ans.2: Here, L = 250, S = 160
Range = L – S = 250 – 160 = Rs. 90
Coefficient of Range = (L – S)/(L + S)
= (250 – 160) / ( 250 +
160)
= 0.22

8
QUANTITATIVE METHODS
• Average Deviation Measures ( Variance &
Standard Deviation)
• Variance (Population Variance): “Dividing
the sum of the squared distance between the
mean and each item in the population by the
total number of items in the population”
• “Average squared deviation between the
mean and each item in a series”

9
QUANTITATIVE METHODS
• Population Standard Deviation(Standard
Deviation):
• “The Square root of the variance in a series.
It shows how the data are spread out”
• “The Standard deviation is the square root
of the average of the squared distances of
the observations from the mean”

10
QUANTITATIVE METHODS

11
QUANTITATIVE METHODS
• Ex.1: Calculate Variance & Standard
Deviation from the following Data
• --------------------------------------------------------
Result of Purity Test on Compounds
--------------------------------------------------------
0.04 0.14 0.17 0.19 0.02 0.06 0.14
0.17 0.21 0.24 0.12 0.15 0.18 0.21 0.25
-------------------------------------------------------

12
QUANTITATIVE METHODS
 Ans.1: ------------------------------------------------
• Observation(x) Deviation(x-μ) (x- μ)^2
• ---------------------------------------------------------
• 0.04 -0.126 0.016
• 0.06 -0.106 0.011
• 0.12 -0.046 0.002
• 0.14 -0.026 0.001
• 0.14 -0.026 0.001
• 0.15 -0.016 0.000
13
QUANTITATIVE METHODS
• 0.17 0.004 0.000
• 0.17 0.004 0.000
• 0.18 0.014 0.000
• 0.19 0.024 0.001
• 0.21 0.044 0.002
• 0.21 0.044 0.002
• 0.22 0.054 0.003
• 0.24 0.074 0.005
• 0.25 0.084 0.007
• -----------------------------------------------------
• 2.49 0.051
14
QUANTITATIVE METHODS

15
QUANTITATIVE METHODS
 Ex.2: Calculate Var(X) & S.D from the
following data:
 20, 15, 19, 24, 16, 14

16
QUANTITATIVE METHODS
 Ans.2:--------------------------------------------
x x- μ (x- μ) ^ 2
--------------------------------------------
20 2 4
15 -3 9
19 1 1
24 6 36
16 -2 4
14 -4 16
---------------------------------------------
108 70
17
QUANTITATIVE METHODS

18
QUANTITATIVE METHODS
 Ex.3: Calculate Var(X) & S.D from the following
table
 -----------------------------------------
Class Frequency
-----------------------------------------
700 – 799 4
800 – 899 7
900 – 999 8
1000 – 1099 10

19
QUANTITATIVE METHODS
 1100 – 1199 12
1200 – 1299 17
1300 – 1399 13
1400 – 1499 10
1500 – 1599 9
1600 – 1699 7
1700 – 1799 2
1800 – 1899 1
------------------------------------
20
QUANTITATIVE METHODS
 Ans.3:------------------------------------------------
Class x f f*x x- μ (x- μ)^2 f*(x- μ )^2
---------------------------------------------------------
700– 799 750 4 3000 -500 250000 1000000
800– 899 850 7 5950 -400 160000 1120000
900– 999 950 8 7600 -300 90000 720000
1000–1099 1050 10 10500 -200 40000 400000
1100–1199 1150 12 13800 -100 10000 120000
21
QUANTITATIVE METHODS
1200–1299 1250 17 21250 0 0 0
1300–1399 1350 13 17550 100 10000 130000
1400–1499 1450 10 14500 200 40000 400000
1500–1599 1550 9 13950 300 90000 810000
1600–1699 1650 7 11550 400 160000 1120000
1700–1799 1750 2 3500 500 250000 500000
1800–1899 1850 1 1850 600 360000 360000
-----------------------------------------------------------
100 125000 6680000
-----------------------------------------------------------
22
QUANTITATIVE METHODS

23
QUANTITATIVE METHODS
• Ex.4: Find the Standard deviation from the
following data:
 Age under : 10 20 30 40 50 60 70 80
 No.Per.dying: 15 30 53 75 100 110 115 125

24
QUANTITATIVE METHODS
 Ans.4: -----------------------------------------------
Age x f f*x x- μ (x- μ)^2 f*(x- μ )^2
---------------------------------------------------------
0 – 10 5 15 75 -30 900 13500
10 – 20 15 15 225 -20 400 9200
20 – 30 25 23 575 -10 100 2300
30 – 40 35 22 770 0 0 0
40 – 50 45 25 1125 10 100 2500
50 – 60 55 10 550 20 400 4000

25
QUANTITATIVE METHODS
60 – 70 65 5 325 30 900 4500
70 – 80 75 10 750 40 1600 16000
---------------------------------------------------------
125 4395 52000
---------------------------------------------------------

26
QUANTITATIVE METHODS

27
QUANTITATIVE METHODS
• Ex.5: Find the Standard deviation of the
following distribution :
• Age: 20–25 25-30 30-35 35–40 40–45 45-
50
 No.of persons:170 110 80 45 40
35
 Ans: 7.936

28
QUANTITATIVE METHODS
 Ex.6: Calculate S.D from the following table
 ---------------------------------------------
Marks No. of Students
---------------------------------------------
0 – 10 5
10 – 20 12
20 – 30 30
30 – 40 45
40 – 50 50
50 – 60 37
60 – 70 21
------------------------------------------
• Ans: 14.839
29